Oil giant BP is recommending its shareholders support a resolution calling on the company to address its climate change risks.
The move comes after Shell recommended its shareholders support an identical resolution, filed by more than 150 investors, including UK local authorities and the Church of England.
The resolutions call on the oil companies to transparently assess their business model against the commitment by governments not to let global temperatures rise more than 2C above pre-industrial levels – the threshold above which “dangerous” climate change is expected.
BP and Shell must also show how they are reducing emissions, investing in renewable energy and reforming their bonus systems so they no longer reward activities which drive climate change, the resolutions urge.
The resolutions also call on Shell and BP to report on their public policy positions relating to climate change.
The shareholders, which include multibillion-pound pension funds, investors and insurers in the UK and internationally, own about 1% of the companies.
BP is recommending its shareholders support the resolution, co-ordinated by environmental lawyers ClientEarth, responsible investment movement ShareAction and the Aiming for A coalition, at the company’s annual general meeting (AGM) on April 16.
ClientEarth barrister Elspeth Owens said: “It’s great news that BP has today recommended its shareholders support the climate risk resolution.
“This confirms the potential of shareholder engagement and demonstrates that BP is listening to some of its biggest investors.”
Edward Mason, head of responsible investment for the Church Commissioners, part of the Aiming for A coalition, said: “The positive way in which BP and Shell have responded to our shareholder resolutions is completely unprecedented.
“This represents a step change in engagement between institutional shareholders and the oil and gas industry on the strategic challenge that climate change poses to the industry.
“The next step is for investors to back the boards of both companies and to vote for the disclosures that we have requested and that the companies have said they will provide.
“We look forward to seeing the new in-depth reporting from both companies later this year and to continued engagement.”
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